top of page
Data on a Touch Pad


Claims Management Phoenixing

The FCA has released its latest consultation paper affecting the Claims Management Industry.

Since taking over the regulation of claims management companies (CMCs), the FCA has published:

  • 'Dear CEO' letters on financial promotions and acting for customers (June 2019) and the importance of carrying out due diligence to ensure the validity of claims (October 2019);

  • A joint statement with the Information Commissioner's Office (ICO) and the Financial Services Compensation Scheme (FSCS), handling personal data and directing consumers to FSCS (February 2020); and

  • A portfolio strategy letter, which sets out the potential harms that CMCs could cause along with supervision strategies for dealing with them. This followed a comprehensive analysis of the portfolio.

Its current focus is on preventing phoenixing by Claims management firms. This occurs when an individual connected with a dissolved financial service (FS) firm reappears in connection with a claims management company (CMC). The FCA’s view is that this enables a firm to benefit from the former FS firm’s poor conduct by carrying on claims management activities against it.

Preventing phoenixing will: